Proposed EU litigation fund must cover business & human rights cases

Members of the European Coalition for Corporate Justice have made individual and joint submissions to a European Commission consultation on the establishment of an EU fund to provide financial support for litigating cases relating to “violations of democracy, rule of law and fundamental rights”. Any proposed fund must cover business and human rights cases.

Gross business malpractices violate the fundamental rights of European and non-European citizens alike. ECCJ member groups have direct experience facing the obstacles, including financial, when attempting to exercise and protect the fundamental rights of victims against large and well-resourced companies through European courts. Litigation to enforce fundamental rights and obtain remedy for business human rights violations typically requires money of victims and civil society organisations that they do not have.

Article III, ‘Access to Justice’ of the United Nations Guiding Principles (UNGPs), adopted by the EU in 2011 obliges it and all other Member States to ensure effective access to judicial remedy for victims of human rights violation by businesses operating inside and outside their territory. This includes making funds available for victims to pursue litigation, mirroring the first recommendation of the EU Fundamental Rights Agency report, “Improving access to remedy in the area of business and human rights at the EU level” (page 6). The EU Fundamental Rights agency highlights that:

‘Article 47 of the Charter stipulates that legal aid “shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice”. There is notably no limitation as to residence or citizenship in this provision. Within the scope of EU law application, this Charter provision is the benchmark against which Member States’ laws and practice should be measured also when it comes to human rights abuses through business activities or omissions. The 2016 Council of Europe Recommendation underlines the availability of a needs-based legal aid. The 2016 UN guidance emphasises the importance of advice on options of litigation funding, such as litigation funds that may be receiving seed money from governments but would raise money also through other means.’

In addition to including victims of business harm within the scope of the proposed litigation fund, the EU should also extend the Council Directive 2002/8/EC of 2003, which already provides framework for legal aid in cross-border disputes within the EU. This should be extended to cover all cases where claims are filed on the basis of a jurisdiction attributed to the Brussels I Regulation. Extending this framework to extraterritorial disputes outside the EU can be justified on the basis of article 81(2)(e) of the Treaty on the Functioning of the European Union, which allows for the adoption of legislative measures “when necessary for the proper functioning of the internal market, aimed at ensuring … effective access to justice.”

The EU’s now 7 year old commitment to the UNGPs also obliges it to address the numerous procedural and substantive law barriers faced by victims of business malpractice when attempting remedy through EU courts. A summary of key recommendations toward addressing these barriers can be found here.